Whitmer officials bet on storage, rail transport to weather Line 5 closure

Beth LeBlanc
The Detroit News

Michigan released a plan Friday meant to help the state weather expected propane shortages after the ordered May closure of Enbridge's Line 5 through the Straits of Mackinac.

The plan was immediately greeted with criticism by Republican Northern Michigan lawmakers, who said it did little to address the pending propane crisis.

The report recommends companies find other means to transport the heating resource, better ways to store it and measures to protect customers from price gouging when Line 5 is closed. 

Gov. Gretchen Whitmer created the inter-department Workgroup on Propane Energy Security to study changes needed in Michigan's energy market to absorb the decreased propane supply with Line 5's expected May closure. 

Huge petroleum holding tank are visible at an Enbridge Pipelines Inc. facility in Sarnia, Ont. Canada.

The 67-year-old pipeline carries about 540,000 barrels of light crude and natural gas liquids, which serves as a propane sources to the Upper and Lower peninsulas. Propane derived from Line 5's natural gas liquids account for roughly 65% of the U.P. 's propane needs and 55% of the state's overall propane demand. 

The recommendations released Friday are "wholly inadequate" to replace the propane Michigan relies on and would lead to greater environmental risks if the state were to resort to transporting fuel on rail or road, said Enbridge spokesman Ryan Duffy. 

"The recommendations also completely ignore the critical needs of other Great Lakes states and Canada," Duffy said. 

Congressman Jack Bergman, R-Watersmeet, called the state's plan "tone deaf" and a "pipe dream" that will leave Upper Peninsula residents "out in the cold." 

"The plan put in place is to ‘send clear signals,' 'encourage' and eventually 'secure alternative propane deliverability and sourcing options like pipelines, rail and storage,'" Bergman said. "Michiganders can't heat their homes in winter with clear signals and encouragement."

The plan was praised by environmental group Oil & Water Don't Mix, which argued the plan protected the health and safety of Michigan residents while also ensuring stability in the state's propane supply. 

“Michigan’s energy needs can be met without Line 5, and we can’t afford another Enbridge disaster like the Kalamazoo River oil spill," said Liz Kirkwood, executive director of For Love of Water.

Environmentalists have worried about the catastrophic effects a leak in the straits would have on the Great Lakes. After years of debate over Line 5's future, Republican former Michigan Gov. Rick Snyder in late 2018 reached a deal with the company to construct a $500 million tunnel beneath the straits to house a new replacement segment of Line 5.

Whitmer and Nessel have debated and litigated against the company since 2019, culminating with the November revocation of Line 5's easement through the Straits of Mackinac. Enbridge and the state are locked in a court battle currently over the revocation.

Over the past several months, the state has conducted a series of analyses of U.P. and statewide energy needs and how to address potential shortages in supply. The Department of Environment, Great Lakes and Energy helped lead the U.P. Energy Task Force to study the issues. 

"We’ve been working on how to best formulate alternative solutions for meeting those needs while focusing on security, affordability, and environmental soundness,” said Liesl Clark, director of the environmental agency. “This multiagency plan takes the recommendations from the task force and implements them in a real way that will positively impact Michiganders, businesses, and our economy.”

The plan released by five state agencies Friday posits that Whitmer's revocation of Enbridge's easement through the Straits of Mackinac sent "clear market signals" that will encourage other energy providers to meet the demand that will occur once Line 5 is shuttered. 

Already, the state said, some propane companies have made changes and may take additional steps ahead of the May deadline for Enbridge to close down Line 5 — a deadline with which the company has said it will not comply. There is also an interest, aided by state dollars, in expanding rail capacity to transport propane, the state said.

The state has begun to increase stores of propane, encouraged companies to pre-purchase propane to lock in low rates before the pipeline is closed and urged propane users to invest in energy efficient practices and appliances.

The plan released also tasks the Michigan Public Service Commission with better monitoring of propane support and the development of a plan to respond to "potential disruptions."

“The Michigan Public Service Commission takes seriously our responsibilities relating to energy planning and security, regardless of what the future holds,” said Dan Scripps, chairman for the Michigan Public Service Commission.

eleblanc@detroitnews.com